Labour loses donors while £18.9m in debt

The Guardian reports that Labour has lost the support of major donors due to the MPs’ expenses scandals:

Anthony Bailey, the public relations “fixer” who introduced the £1m donor Mahmoud Khayami and has given more than £72,000 himself, said that he would not be donating to Labour and would not encourage others to do so. “The expenses stories are shameful. Anyone who is thought to have broken the law should be investigated by the police immediately,” he said. “I have no intention of giving a single penny to Labour at this time, and I cannot see how I could introduce any of my contacts either.”

Bailey, who claims to have raised £1.4m for the party over the past two years and sits on a government taskforce, added: “I can see many other donors withdrawing their support.”

Read the full article.

Rumours have been circulating that Labour MPs were asked to claim expense so that they could donate to the Labour Party, mired in debt. I’ve not been able to find a source for this, but various bloggers have said that Ken Livingstone knew about the arrangement.

Update: Iain Dale has heard the rumour. View his comments.

In 2002, the Independent reported that “Labour MPs have been told to donate nearly £1,000 each to Millbank because the party’s finances have slipped into the red by more than £6m.” Back then, Labour’s debt was £10 million. Now, it’s twice that.

This fact adds a whisp of smoke …

Do you have information that links the smoke with the fire?

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